Bank of America: Global Stock Markets Nearing Sell Signal

BlockBeats News, June 7th, U.S. bank strategist Michael Hartnett warned that the global stock market is about to trigger a technical "sell" signal after hitting a historic high this week. He stated that the market has become overheated after a rapid 20% surge in just two months.

He cited fund flow and market breadth data as evidence of investors pouring into risk assets with excessively high positions. Traders often see this as a bearish signal, as it theoretically indicates that buying power in the market may soon be exhausted, making a price pullback likely. The data referenced by Hartnett shows that in the past four weeks, funds flowing into stocks and high-yield bonds accounted for 0.9% of total assets.

He stated that if this number rises to above 1%, it would be a signal for investors to sell. Meanwhile, the market is approaching the "overbought zone." Approximately 84% of national indices are above their 50-day and 200-day moving averages. He mentioned that when this indicator reaches 88%, that's his sell trigger point. (FX678)